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Presentation to Gaston County Board of Commissioners Re-Instatement of a Development Fund April 12, 2005

Presentation to Gaston County Board of Commissioners Re-Instatement of a Development Fund April 12, 2005. Recent Projects. UCS. $3,000,000 investment 60 jobs Manufactures track and field equipment Renovation of former Sonoco facility near High Shoals, up to 130,000 square-foot facility

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Presentation to Gaston County Board of Commissioners Re-Instatement of a Development Fund April 12, 2005

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  1. Presentation to Gaston County Board of CommissionersRe-Instatement of a Development FundApril 12, 2005

  2. Recent Projects

  3. UCS • $3,000,000 investment • 60 jobs • Manufactures track and field equipment • Renovation of former Sonoco facility near High Shoals, up to 130,000 square-foot facility • Moved operation in Fourth Quarter, 2004

  4. Essex Parts • $750,000 investment • 10 jobs, 5 employees relocated and 5 new hires • Purchased existing facility in Cramerton • Supplier of performance automotive parts for the racing industry and exclusive importer of AP Racing stock car parts

  5. Carolina Materials LLC • Purchased a Taiwanese company in Sacramento, CA • Relocated company to its facility in Belmont • Resin production and enhancement, resin recycling, and resin sales and re-sales • 20 New Jobs • $2.5 million investment

  6. Southern Shavings • Relocated to existing facility in Cherryville • 20 jobs • $1,000,000 investment with building purchase and machinery & equipment • Purchases saw mill by-product, packages and re-sales shavings

  7. Pizza Equipment Supply, Inc. • Existing company relocates to Cherryville in an existing facility • 10 jobs • Sales, re-furbishes and services standard and customized equipment for national chains, including Pizza Hut, Domino’s and Little Caesar’s.

  8. Atkinson International • Leased 200,000 square feet in the former John Deere facility in Gastonia • 100 jobs • Provide second tier supplier support to Arvin-Meritor in the form of riveted highway truck and trailer brake shoes. • Warehouse and truck and trailer brake shoe riveting

  9. Dimensional Printing, Inc. • Moved to the former 20,000 square-foot Air Technologies facility in Gastonia • Pad transfer printing, spray masking and screen printing for injection molded plastics, metal fabricating, appliances and automotive products.

  10. Curtiss Wright Controls • Moved headquarters, but expands engineering operation • Relocated 15 engineering positions and a $4-million testing and development operation to its Gastonia facility from New Jersey. • Will add senior engineering positions • Plans to invest another $1 million in equipment • Capital improvements to the facility to enable its technical team to develop and test its flight critical hardware to comply with severely demanding conditions • Gastonia facility will continue to maintain, overhaul and repair military aerospace products, subsystems and components

  11. Colortex USA, LLC • Located headquarters and operation to a 30,000 square-foot facility in Gastonia. • Will serve as company’s North American Headquarters and finishing operations. • $2 million investment in machinery and equipment • 30 jobs • Provides finishing for knitted fabrics used in mattresses

  12. EDC Structure and Activities • Continuing to integrate public and private funding to have a united, cooperative approach to economic development – the County and Chamber are leaders in the region • Private money has greatly extended the County’s economic development program. It has expanded our marketing efforts. The Private money works “hard” because it does not have overhead expenses and is largely spent on marketing

  13. EDC Structure and Activities (Continued) • Marketing efforts have expanded greatly • The County added a new Marketing Director to the EDC staff to strengthen the program and to utilize the private money more effectively • Marketing activities include: • Atlanta/Greenville consultant mission • NY/NJ consultant/company mission • Tradeshow participation at Fabtech (metalworking), PRI (motorsports), MD&M (medical devices • Friends of NC sponsorship – Bio2004 (biotechnology), NC Open (consultants), SEUS/Japan (Japanese companies) • Cluster Analysis by Rick Cauthen

  14. EDC Structure and Activities (Continued) • Marketing activities include: (Continued) • Marketingbrochure • PDF version of marketing brochure for the web site • 30-second ad for Time Warner cable from marketing DVD • Image building events • Ally Appreciation Day --120 participating consultants, brokers and developers • German American Chambers of Commerce meeting – NC chapter meeting attended by 70 people, member companies from NC, SC and GA, Part of an 11-state organization • Friends of North Carolina – Consultant luncheon (NY and Atlanta), Bio2004 reception, NC Open and SEUS/Japan reception

  15. Other Activities • Garden Parkway grant for land corridor study • Adaptive building re-use study • Cluster analysis study

  16. History of Development Efforts • Limited prepared site offerings • Lack of utility coverage, especially water and sewer lines • Lack of capacity in water and sewer plans • No zoning in place to protect business park sites or to ensure compatible adjacent uses • Limited recruitment options

  17. History of Development Efforts – 1980’s to 1990’s • Implemented zoning to protect sites and ensure long-term land use patterns • Implementation of a Capital Improvements Plan to extend water and sewer lines to business park sites, plant locations, inter-connect municipal systems, expand water and sewer plants, and build water tanks. • Assisted in the development of business parks throughout the County

  18. History of Development Issues: Late 1990’s to Present • Acquired land to develop for industrial parks to compete for high-end manufacturing projects – Gastonia Technology Park (GTP) • Developed a “Class A” office park at Court Drive • Need to “certify” or pre-qualify sites through completion of due diligence items • Site selection process pace sped up dramatically. Need to be prepared when selection team arrives. No longer have the option to solve problems “in arrears” • Need to create segmentation in the sites that are developed

  19. Business Parks ParkAcreageTenants The Oaks (Belmont) 250 Logisco, Thermoform, LVD, Cross Automation, IDG Twinbrooks (Stanley) 350 DSM Desotech, Buckeye Technologies, US Leisure, Deb SBS Sunbeam (Cherryville) 300+ Gold Metal Homes, Keystone Carbon, Pepsi Distribution Southridge (Bessemer City) 380+ Advanced Drainage Systems, Hunter Douglas Industrial Pike (Gastonia) 125 Beverly Knits, Gutterguard, Sign Connection, Belt Shop Farmington Hills (Gastonia) 50 Sunbelt Rentals, McNaughton McKay Gibson (Dallas) 35+ Interfic, Gibson Machine GTP (Gastonia) 350 Ortronics The Summit (Gastonia) 60 Charlotte Orthopedics, USDA, Caromont Pediatrics, other medical practices KMCC (Kings Mountain) 100 Sara Lee Intimates Woodlake (Kings Mountain) 125 Firestone Fibers & Textiles Delta (Gastonia) Aksys, Freightliner, Performance Friction, Jewell Building Sys., Bartlett Bearing

  20. Existing Business Parks – The Rest of the Story Developed Undeveloped ParkAcres%Acres% The Oaks (Belmont) 92 37% 158 63% Twinbrooks (Stanley) 75 33% 149 67% Sunbeam (Cherryville) 167 71% 68 29% SouthRidge (Bessemer City) 40 16% 203 84% Industrial Pike (Gastonia) 130 81% 30 19% Farmington Hills (Gastonia) 8 14% 48 86% Gibson (Dallas) 10 23% 34 77% GTP (Gastonia) 41 11% 332 89% The Summit (Gastonia) 19 33% 39 67% KMCC (Kings Mountain) 36 18% 164 82% Woodlake (Kings Mountain) 65 39% 100 61% Delta (Gastonia) 102 71% 41 29% Kendrick (Mount Holly) 19 30% 44 70% North Pointe (Mount Holly) 59 56% 47 44% Belmont Abbey 0 0% 284 100% Totals 863 29% 1,741 67%

  21. Gaston County Industrial Land Absorption 1983 - 2004

  22. Gaston County Industrial Land Development Potential and Cost

  23. Gaston County Absorption by Acreage Range 1983 - 2004

  24. Gaston County Developable Sites By Acreage Range

  25. Gaston County Absorption Versus Development

  26. Conclusions • In the last 20 years, more than 60 parcels have been developed for industrial use • The majority of the site, 50%, have been less than 5 acres – 30% range from 6 to 15 acres • Six parcels have been larger than 35 acres. While this is a small percentage of the number of parcels, it represents the largest consumption of acreage. These six transactions represent more than $200,000,000 of investment

  27. Conclusions (Continued) • The volume of transactions is in smaller sites, but the largest tax base increase is in the large site sales, meaning we need a mix of all sites to be competitive for the smaller, faster moving parcels and large sites for slower moving, high-impact sites • The $12,000,000 would complete the development of existing parks. Additional funding would be needed to purchase more land for larger sites for high-impact projects. This would require additional funding of $15,000,000 to $20,000,000

  28. Conclusions (Continued) • A gap would exist from the +/- 1,200 acres that can be developed and what would be needed, especially in the large size sector • The additional land to be acquired should create additional large sites • More acreage is needed than to simply match the anticipated absorption. The site selection process is not always efficient (i.e. All three-acre sites are not the same dimension, topography, utilities, etc. and there is “segmentation” in the quality of the sites – • Class A, B and C).

  29. Future Concerns • Residential land use demands will drive out industrial uses because the quicker development time and higher rates of return • Cost to serve “development” per dollar of tax revenue: York County, SC • Residential: $1.45 • Industrial: 31 cents

  30. Future Concerns (Continued) • Union County Example (Charlotte Observer 4/9/2005): • Union’s schools have submitted a $520 million five-year capital improvement plan, and most of it would go toward new schools. • The County, including the schools, has $150 million in outstanding debt. Projected to rise to $550 million by 2010, with about $500 million coming from the schools • County revenues are not keeping up with expenses, and Union risks a lowered credit rating if it depletes its savings and/or devotes too much of its budget to debt payments • Union’s tax base is 80% residential, and commissioners agreed the lack of commercial base is crippling the County’s fiscal health

  31. Future Concerns (Continued) • A strong industrial/business base is essential for tax and job generation. If current trends continue, the residential portion of the base will bear more of the tax base • The County’s sites are the gateway to accessing projects. Many times the available sites are used as a “proxy” for the preparedness and quality of the community • As site location decision-making process is moving more quickly, land development processes are lengthening, making is imperative to have sites/buildings available

  32. Future Concerns (Continued) • Preparation of sites for future development is paramount to create tax base and employment centers • Quality sites are needed to attract major companies and investment • Sites and land are rapidly dwindling throughout the region • The county with the best sites will be the eventual winner in economic development

  33. Trends Related to the Community

  34. Recommendations • Find the mechanism(s) to develop remaining acreage in parks with the best development opportunities (i.e. self-financing bonds, grants, loans, etc.) • Gain control/ownership of large parcels that can be developed over time to support the major projects requiring sites of 35+ acres with opportunity to create more jobs and significantly add to tax base. Sites would generally be owned by a municipality or county because of the significant length of time required to develop, market and sell such sites. In addition, because of the positive financial impacts to the local governments, most companies locating on these sites are given the property or purchase it at a reduced rate, virtually eliminating the opportunity for private developers.

  35. Recommendations (Continued) • The county/municipality should work closely with private developers to create business parks with smaller sites that can accommodate a variety of users. These sites are absorbed more rapidly and the market is deeper for such properties. The county/municipalities should provide infrastructure to assist/encourage this development • Time is critical. The inventory is needed today to be competitive. If the sites are not acquired soon, residential uses will consume the sites or create compatibility issues of having a business park adjacent to the subdivisions

  36. Suggested Actions • Create and find a “new” CIP program that would be at least $2,000,000 with a commitment to funding it annually • The fund should be a development fund used to address the lack of readily available business park sites to pay for items listed below: • Water and sewer lines in business parks • Rail lines and spurs to serve potential tenants • Land plans for business parks • Grant program to partially support park owners applications for NC Dept. of Commerce “Certified Site” designation • Land acquisition of key parcels including the appropriate use of debt for purchase of larger tracts • Road construction in business parks

  37. Suggested Actions • Seek other sources of funds for development assistance from the following: • Department of Transportation • Self-Financing Bonds • Grants • Partnerships with private developers and land owners • Owner financing of key parcels the County wants to purchase

  38. How to Use the Funds • The Gaston County Board of Commissioners would approve major projects from the fund. • The fund would be used to begin a variety of projects immediately • Some projects will be short-term and others such as land acquisitions and assemblage will occur over several years • To make this program effective, some level of debt must be undertaken to acquire larger parcels of land • The proposed debt would be repaid out of the fund and managed to allow for long-term acquisition of sites and the short-term development projects for water and sewer.

  39. How to Use the Funds • The EDC will prepare a business plan and regularly update the Board of Commissioners on the status of the fund and projects.

  40. Conclusions • The Gaston County Board of Commissioners has the final approval on projects and will have the ultimate oversight of the CIP • The EDC will contribute the personnel and expertise to use the funds for development of business parks • The re-instatement of the CIP will help improve our competitiveness for new and expanded business locations • The CIP will create a long-term strategy that will assist in the rebuilding and diversification of the economy • The County’s economy is at a turning point. We still have the opportunity to influence and direct our economy by investing in business parks

  41. Conclusions • If we choose not to make these investments, the county will largely become a residential county with a declining business base. • This would lead to some very difficult trends: • A reliance on residential tax base for revenue • A declining industrial/commercial tax base which is typically a “money-maker” for the County • Growing need for new schools with less ability to pay for them • The lack of business park sites would create a bedroom economy where we are dependent on another County to create jobs for our citizens

  42. Conclusions • We have the ability to recruit new businesses. If the CIP is re-instated, it will provide the missing piece of our program and make us more effective in re-building our economy

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